Tax Gain/Loss [R0311]

The Tax Gain/Loss report [R0311] provides tax gain or loss information on assets sold during the fiscal year. Included in this report are assets sold either through a lease or asset payoff or through the sale of off-lease inventory (using the Payoff update [U0103]). Three reports are produced, one for federal, one for state, and one for alternative minimum tax.

The report may be accessed through the Controllers Tax report menu [R03] and may be selected interactively for:

• all sold assets
• a portfolio

The report may be run automatically at the end of the year through the End of Period update [U0401]. Use the End of Period MODULES AND REPORTS screen under the End of Period Customizations option of the Portfolio update [U0212] to specify whether the report is created.

The Tax Gain/Loss report [R0311] is segregated into 3 parts: the Federal Tax Gain/Loss report [R0311A], the State Tax Gain/Loss report [R0311B], and the AMT Gain/Loss report [R0311C].

The report is organized by all of the following:

• Portfolio
• State (for the State Tax Gain/Loss report only)
• Tax type (True Lease and CSA)

Refer to theAddtional Information section for more information on tax type.

 

Tax Gain/Loss Selection

• ALL
  Enter 'X' to report on all sold assets for the fiscal year. Leave blank to report on a specific portfolio.
  
  
• PORT
  Enter the number of the portfolio upon which to report. Leave blank if reporting across portfolios.

 

Federal Tax Gain/Loss Report

The Federal Tax Gain/Loss report [R0311A], State Tax Gain/Loss report [R0311B], and the AMT Gain/Loss report [R0311C] all report at the asset level and provide the following information for sold assets:

• LEASE
  The lease number is displayed if the asset was sold through the lease or asset payoff option of the Payoff update [U0103]. The lease number is not displayed if the asset was sold through the Sale of Off-Lease Inventory option of the Payoff Update [U0103].
  
  
• ASSET
  The asset number is displayed.
  
  
• IN-SERVC DATE
  The date the asset was placed in service, as entered through the Add Asset option of the New Lease update [U0101], is displayed. The in-service date is the starting date for depreciation.
  
  
• SALE DATE
  The effective date of the lease or asset payoff, or the date of sale of the asset is displayed.
  
  
• DEPR METHOD
  The method under which the asset is being depreciated (e.g., straight line, ACRS, MACRS, etc.) is displayed.
  
  
• ORIGINAL TAX BASIS
  The starting tax basis of the asset is displayed. The TAX BASIS is the original acquisition cost for state and AMT calculations. The FEDERAL TAX BASIS is reduced by one-half of the original ITC amount if the full amount of ITC available (i.e., 6% for 3-year equipment or 10% for all other equipment) is taken.
  
  
• FEDERAL/STATE/AMT LTD DEPRECIATION
  The life-to-date (through the sale date) federal, state, or alternative minimum tax depreciation is displayed for assets with a tax type of true lease. Assets with a tax type of CSA (conditional sales agreement) are not depreciated and thus have zero life-to-date depreciation.
  
  
• ADJUSTED TAX BASIS
  The federal, state, or alternative minimum tax basis is displayed.
  
  For assets with a tax type of 'true lease', the federal tax basis is calculated as follows:

ORIGINAL TAX BASIS
- FEDERAL LTD DEPRECIATION
+ 1/2 OF THE AMOUNT OF ITC RECAPTURED
(if the full amount of ITC available was taken)

For assets with a tax type of 'true lease', the state and AMT tax basis are calculated as follows:

ORIGINAL TAX BASIS
- STATE/AMT LTD DEPRECIATION

For assets with a tax type of CSA (conditional sales agreement), the federal, state, and AMT tax basis is based upon the financial book value of the lease (if the lease or asset was paid off) or is the inventoried value of the asset (if the asset was sold from inventory). In the former case, the book value is calculated as follows:

For precomputed interest type leases:

CONTRACT RECEIVABLE
+ RESIDUAL
- UNEARNED INCOME
+ UNAMORTIZED TAX IDC

For simple interest type leases:

PRINCIPAL OUTSTANDING
+ UNAMORTIZED TAX IDC

• PROCEEDS FROM SALE
  The amount received from the payoff or the sale of the off-lease asset in inventory is displayed. This amount is the total amount received, exclusive of any amounts refunded, amounts placed in suspense, amounts applied to any current payment or assessment receivable, etc. In other words, PROCEEDS FROM SALE does not include any amount applied to anything other than the financial book value. (These amounts excluded from PROCEEDS FROM SALE are, in turn, reported on the Taxable Income report [R0301].) For Off Lease Billing users, this amount may also include OLB Proceeds from Payoff [U0103].
  
  
• FEDERAL/STATE/AMT GAIN(-LOSS)
  The amount of the gain or loss on sale is displayed. A loss is recorded if proceeds are less than the current tax basis and is signified by a negative number. A gain is recorded if proceeds are greater than the current tax basis and is signified by a positive number. The gain or loss is calculated as follows:

  PROCEEDS FROM SALE
  - ADJUSTED TAX BASIS

• TOTALS/GRAND TOTALS
  The page totals for the federal and AMT report reflect the number of assets and all dollar amounts for each portfolio and lease type (true lease and CSA). The page totals for the state report reflect the number of assets and all dollar amounts for each portfolio, state, and lease type (true lease and CSA).
  Grand totals are shown for the number of assets and all dollar amounts.

 

Additional Information

The tax type is defined at the asset level when the asset is entered into the system through the Add Asset option of the New Lease update [U0101]. Tax type describes the categorization of the asset for tax reporting. There are 2 basic tax types:

• True Lease
  A true lease is considered a true lease (or operating lease) for tax purposes.

• CSA
  A conditional sales agreement (CSA) is considered a direct finance lease for tax purposes.

 

LeasePak  Documentation Suite

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